Potential sanctions on Huawei to have limited impact on Taiwan: MOEA

Taipei, Potential U.S. sanctions against China-based telecom giant Huawei Technologies Co. are expected to have little impact on Taiwan, thanks to local companies’ market diversification efforts, a government official said Friday.

“The impact on Taiwanese companies will be little, as Huawei engages mainly in building core networks equipment. Given its limited sales to the U.S., the matter will not be a big threat to Taiwanese suppliers who have partnered with other countries, even if Huawei needs to transfer orders to other countries,” Minister of Economic Affairs Shen Jong-chin (???) told reporters.

Meng Wanzhou (???), chief financial officer of the Shenzhen- based Huawei, was arrested in Canada Dec. 1 at an U.S. extradition request following a reported investigation by U.S. authorities into allegations about suspected Huawei sanction breaches on Iran.

The incident came shortly after a truce was reached in a trade war between the U.S. and China, and many are worried that more accusations targeting Huawei will come from the U.S. following Meng’s detention.

It is widely speculated that Huawei might be just one of many Chinese companies likely to be hit by greater restrictions in exports of sensitive high-tech technologies, such as artificial intelligence, chips, quantum computing and robotics, to be imposed by the U.S.

As uncertainties remain surrounding the U.S.-China trade dispute and the global economy, Shen said the government is poised to help China-based Taiwanese companies to shift their production chains to countries covered by Taiwan’s “New Southbound Policy” and to seek bilateral investment agreements with those countries.

Whether such companies decide to return to Taiwan or relocate to countries in Southeast Asia, it is a pressing issue, and the government must resolve water, power, land, workforce and professional talent shortage problems, he said.

Several industrial parks developed by Taiwanese investors have been established in the Philippines, Myanmar, Vietnam and India, which can accommodate Taiwanese small and medium-sized businesses and provide a shield for them when they try to establish strongholds in Southeast Asian countries, Shen said.

Chan Cheng-tien (???), vice chairman of the Chinese National Federation of Industries, urged Taiwanese companies to seize the opportunity to break into Southeast Asian markets at a time when countries in the region are developing their economies.

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